Question: Need help solving this hedging problem Bayer AG in Germany has sent you a confirmation for a large order worth 100 million Euros for chemicals

Need help solving this hedging problem

Need help solving this hedging problem Bayer AG in Germany has sent

Bayer AG in Germany has sent you a confirmation for a large order worth 100 million Euros for chemicals in the production of Aspirin. The terms are: Down: 40 Million Euros 30 Day Payment: 30 Million Euros 60 Day Payment: 30 Million Euros Payment will be made in Euros. The Spot and Forward rates are: Spot: $ 1.4635/Euro 30 Day: $ 1.4555/Euro 60 day: $ 1.4450/Euro The WACC cost is: 6%. 30 Day interest for borrowing is: 4%. For 60 days: 5%. American Put Option contracts are: 30 day contract at strike price of $ 1.4650/Euro with the premium at: 2.5 cents per Euro. The 60 day Put Option contract has a strike price of $ 1.4545/Euro with a premium of 3.7 cents per Euro. Which hedging method would you use and why

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